A Critical Review of the Resolution on Artificial Intelligence Services License

I was recently drafting a research report for the Legal Commission of the Chamber of Commerce regarding the new resolution by the Communications Regulatory Commission (the AI Services License or AISP). This resolution seems alarming; in that the regulatory body has designed the heavy obligations of major telecommunication operators for the nascent and agile ecosystem of artificial intelligence.

When conditions such as providing a minimum of 200 PetaFLOPS of processing power, paying a 50 billion Toman initial licensing fee, submitting a 100 billion Toman bank guarantee (massive, prohibitive sums in the local economic context that effectively act as an insurmountable barrier to entry for the private tech sector), and surrendering 3% of gross annual revenue as the government's share are included in this resolution, a clear message is sent to the market: the entry of startups and small to medium-sized enterprises (SMEs) into this field is prohibited.

From a legal perspective, this method of regulation has several fundamental flaws:

First, the Regulatory Commission, whose inherent duty is the regulation of physical and telecommunication networks, has effectively exceeded its legal authority by entering the software and algorithm processing layer.

Second, imposing amounts under the title of a revenue share, without explicit authorization from the legislature, is a clear instance of bypassing Articles 51 and 53 of the Constitution, which establish the principle of legality in taxation—meaning no government fee can be levied without direct parliamentary legislation, and all state revenues must be consolidated in the national treasury.

Third, this magnitude of financial and hardware barriers is in blatant contradiction with the Law on Implementation of the General Policies of Article 44—Iran's privatization laws designed to prevent monopolies and encourage private sector competition—and the Law on Support of Knowledge-Based Companies. The result of this approach will be the creation of a dangerous monopoly for a few "quasi-governmental" companies (entities that are ostensibly privatized but remain under the heavy influence of state or military-affiliated organizations, giving them unfair market advantages) or macro-capitalists, who usually, by receiving massive loans and numerous benefits, ultimately produce outputs with very low efficiency and high costs that will not be able to compete with quality products.

The development of artificial intelligence does not occur through mandates and the creation of heavy financial barriers. With this trajectory, not only will this technology not be promoted in the country, but the sector will suffer even more damage. In my opinion, before irreparable harm is inflicted on this ecosystem, we have no choice but to pursue the annulment of this resolution through the Court of Administrative Justice (the highest administrative tribunal where citizens can sue to annul illegal government regulations), the Competition Council (the national anti-monopoly watchdog), and the Deregulation Board (a governmental body tasked with removing unnecessary business licenses and bureaucratic barriers).

Written by Reza Bastani Namaghi